U.S.

Department of Labor Administrative Review Board

200 Constitution Avenue, N.W.
Washington, D.C. 20210

In the Matter of:

ATLANTIC ELECTRICAL ARB CASE NO. 96-191

SERVICES, AES, INC., and
JAMES R. SEFAH DATE: May 28, 1997

BEFORE: THE ADMINISTRATIVE REVIEW BOARD

FINAL DECISION AND ORDER

This matter arises under the labor standards provisions of the Federal-Aid Highway A ct,
23 U.S.C. § 113(a), a Davis-Bacon Related Act (DBRA), and 29 C.F.R. Parts 5, 7 (1996). It is
before the Administrative Review Board on the petition of James Sefah and AES, Inc.
(Petitioners) for review of the August 13, 1996 final ruling letter issued by the Office of
Enforcement Policy, Government Contracts Team, Wage and Hour Division (Administrator),
U.S. Department of Labor.

The Administrator denied the Petitioners’ request for early removal from the debarred
bidders list. For the reasons set forth below, the petition for review is denied and the
Administrator’s decision is affirmed.

BACKGROUND

On December 7, 1994, the Administrator issued a charging letter to Petitioners alleging

aggravated and willful violations of DBRA. Three copies of the charging letter were sent to
Petitioners in: New Orleans, Louisiana (Certified Mail # P115 448 678); Marrero, Louisiana
(Certified Mail # P115 448 652); and Harvey, Louisiana (Certified Mail # P115 448 658). The
letters sent to the New Orleans and Marrero addresses were returned to the Administrator by the
United States Postal Service as “Addressee Unknown” and “M oved, Left No Address.”
Administrative Record (A.R.) Tab N. The letter addressed to Petitioners at Harvey, wh ich is
Petitioner Sefah’s residence, was unclaimed after an attempt at delivery and two notices. Id.

The Petitioners, as a corporate entity and as an individual, were debarred by the

Comptroller General on April 3, 1995, pursuant to the Administrator’s request. The Petitioners
requested early removal from the debarred bidders’ list on October 5, 1995. A.R. Tab K. The
Wage and Hour Division investigated Petitioners in order to determine whether early removal
from the debarred bidders list was warr anted and the P etitioners’ request was denied.

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 DISCUSSION

The regulation at 29 C.F.R. § 5.12(c) which provides that a debarred contractor may
request removal from the debarm ent list after six months, requires the Administrator, Wage and
Hour Division, to examine the facts and circumstances surrounding the violative practices which
caused the debarment and to determine if the debarred person or firm has demonstrated a current
responsibility to comply w ith the requisite labor standards. Among the factors to be considered
are the severity of the violations, the contractor’s attitude toward compliance, and the past
compliance history of the firm with the labor standards provisions applicable to Federal contracts
and other Federal labor standards statutes, such as the Fair Labor Standards Act (FLSA), 29
U.S.C. § 201 et seq.

The Administrator reviewed the debarment case file and determined that the underlying
violations were of sufficient gravity as to be properly regarded as aggravated or willful within
the meaning of 29 C.F.R. § 5.12(a)(1). The Administrator’s review of the Petitioners’
compliance history prior to the events leading up to the debarment revealed that there had been
four previous violations of DBRA labor standards, each requiring back wage payments to
Petitioners’ employees. A.R. Tab A at 2; Tab F. The Administrator further considered
Petitioners’ violation of the FLSA in another business venture (the AES Group, Peanuts Product
Division, in Opelika, Alabama), subsequent to debarment, and determined that these factors
taken together were sufficient to deny the Petitioners’ request for early removal. A.R. Tab E at
2.

We follow precedent in deferring to the Administrator, to whom the DBRA rulemaking

functions are entrusted, as being in the best position to interpret those rules, and barring an
interpretation that is unreasonable, arbitrary or capricious, or a departure from past practice the
Administrator’s decision will b e upheld. In the Matter of Titan IV Mobile S ervice Tower , Wage
Appeals Board (WAB) Case No. 89-14, May 10, 1991, slip op. at 7, citing Udall v. Tallman, 380
U.S. 1, 16-17 (1965). See, In the Matter of Patton-Tully Transportation C o., WAB Case No.
93-13, May 6, 1994 (Board is to determine if Wage and Ho ur’s application of a rule is
reasonable and not a departure from past determ inations); cf. In the Matter of Bhatt Contracting
Co., Inc. and Vijay A. Bhatt, ARB Case No. 96-124, Order Denying Administrator’s Motion to
Dismiss and Order of Remand, issued Sep. 6, 1996 (undue delay by Administrator in requesting
petitioner to be placed on debarment list is breach of Consent Order); In the Matter of Heavy
Constructors Assoc. of the Greater Kansas City Area, WAB Case No. 94-13, issued Oct. 11,
1994.

Although the Petitioners now contend that they were not at fault in not responding to the
charging letter(s), the debarment became effective in 1995 and Petitioners’ appeal concerning
that action at this time, is not timely. Nor are we persuaded by Petitioners’ contention that they
have precluded any further violations of DBRA by using an outside accounting firm to prepare
payroll checks for employees. The accounting firm merely prepares the payroll checks for the
Petitioners’ employees in reliance on the information provided to them by Petitioners. Although

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 the Wage and Hour investigation did not uncover any violations under this method, there is no
inherent safeguard to ensure proper payment to Petitioners’ employees . Compare In the Matter
of IBEW Local No. 103, ARB Final Dec. and Order, Case No. 96-123, Nov. 12, 1996, slip op.
at 3.

For the reasons stated above, the decision of the Administrator is affirmed and the
petition for review is DISMISSED.

SO ORDERED.

DAVID A. O’BRIEN
Chair

KARL J. SANDSTROM
Member

JOYCE D. MILLER
Alternate Member

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